Two of the founders of Apollo Management, the US buyout house, have been personally named in a $3bn (â¬1.9bn) lawsuit in the latest private equity deal to head to the courts.

US chemical manufacturer Huntsman has filed a lawsuit naming Leon Black and Joshua Harris for “fraud and tortious interference” and said in a statement it is seeking damages exceeding $3bn.

In June last year Huntsman agreed to be acquired by Dutch chemical manufacturer Basell for $9.6bn.

A month later, Huntsman terminated the agreement with Basell and agreed to a higher $10.6bn bid from Hexion Specialty Chemicals, one of Apollo’s portfolio companies.

Last week Apollo and Hexion filed a lawsuit against Huntsman alleging that the capital structure agreed to for the combined company is no longer viable because of Huntsman’s increased net debt and its lower than expected earnings. The suit alleged that Hexion does not believe that the banks will provide the debt financing for the merger contemplated by their commitment letters.

Jon Huntsman, founder and chairman of Huntsman, said in a statement: “I am outraged that Apollo’s founders, Leon Black and Josh Harris, while personally and repeatedly assuring our board of directors, our senior officers, our financial advisors and me of their earnestness, instead pursued a strategy designed to cause us to terminate with Basell to accept promises they never intended to keep—all calculated to contrive a nonexistent ‘purchase option’ we specifically refused to grant Hexion during our negotiations, awaiting the day when they would try to force us to concede a price reduction.”

Hunstsman also said it intends to contest the “false and misleading allegations” made in the lawsuit filed by Apollo and Hexion last week and said it is a strong and profitable company, with ample financial resources to continue operating.

Hexion said in a statement: “As we alleged in our suit, primarily due to Huntsman’s underperformance, we believe that consummating the merger on the basis of the capital structure agreed to with Huntsman would render the combined company insolvent. In fact, Huntsman’s suit does not dispute that the combined company would be insolvent. We believe Huntsman’s lawsuit is wholly without merit.”

The Huntsman deal is the latest private equity deal struck at the height of the boom in leverage, which has involved a lawsuit.

Last week, Canada's Supreme Court ruled in favor of BCE, overturning a lower court decision to block the C$34bn (€22bn) leveraged buyout of the Canadian telecoms company by a private equity consortium led by Ontario Teachers' Pension Plan.